Optus and Aussie dollar push down SingTel results

Stuart Corner
Thursday, 03 August 2006 18:22

IT Industry - Strategy

SingTel has reported a 1.4 percent decline in operating revenue for the quarter and an 8.0 percent decline in EBITDA, due largely to the performance of its biggest revenue and profit contributor, Optus and a weaker Australian dollar.
During the quarter, SingTel group's operating revenue declined 1.4 per cent to $S3.17 billion. Optus, which accounts for two-thirds of the Group’s revenue, saw operating revenue fall in Singapore dollar terms due mainly to a weaker Australian dollar against the Singapore dollar However, in Australian Dollar terms, Optus revenue grew 5.3 percent.

Group EBITDA declined 8.0 per cent mainly due to weaker operational performance of Optus and the currency translation impact of the weaker Australian dollar.

For the quarter to 30 June 2006, Optus revenue grew by 5.3 percent to $A1.83 billion but operational EBITDA decreased 6.9 percent to $A478 million. Optus reported a 160 percent increase in net profit to $A385 million, including net exceptional gain on intra-group divestments. In the quarter, Optus sold its interest in the Southern Cross Cable to another  subsidiary of SingTel, recording an exceptional accounting gain of $A276 million. When this item was removed, Optus' net profit was down 21.9 percent to $A109 million.

One of the strongest growth areas was consumer broadband where revenue grew 37 percent to $A70 million. Optus had 618,000 broadband customers after adding 54,000 retail broadband customers  during the quarter.

Optus is aiming to migrate its largely resale DSL customer base to  its own DSLAM network and to date has commissioned 148 exchanges to serve 30,000 customers  directly.

CEO, Paul O'Sullivan said: "We would like to accelerate our migration rate to bring customers onto the network more quickly.  However [Telstra] has set an arbitrary limit of two exchanges per day per state where migrations can occur.  We have notified a dispute with the ACCC so we can increase this limit."